In Some Parts of Budget, JFC Shows Affinity for Federal Funding
By Siphoning off More TANF Funding to Pay for the EITC, Committee Undercuts Arguments Against Using Federal Funds
The Joint Finance Committee votes Thursday, May 21, on a wide range of Medicaid issues, including whether to expand BadgerCare and save upwards of $345 million that could help prevent deep cuts in higher education and other parts of the budget. The most frequent argument made by conservatives against capturing that federal assistance is that we shouldn’t accept federal funding that might not be secure. However, if you were carefully watching the Finance Committee’s budget votes last Thursday you would have gotten a very different perspective on the willingness of the majority party to accept federal funding.
There were at least two times last Thursday when the JFC voted to amend the Governor’s budget in ways intended to capture or utilize more federal funding. In one case (motion #345) the committee unanimously approved new standards that will make it easier for the Department of Children and Families to close child support cases. The primary rationale for the change is that closing old cases with uncollectible child support obligations will mean that Wisconsin collects support in a larger percentage of the ongoing cases, and that is expected to increase our share of federal performance-based bonuses.
The other pertinent amendment approved Thursday is one I find troubling, but it’s an even more interesting counterpoint to the ideological opposition to accepting Wisconsin’s share of the federal funding for Medicaid expansions. On a vote of 12-4, the committee decided to use $12.3 million more than the Governor had recommended from the federal welfare reform block grant (known as TANF funds) to replace state funding for Wisconsin’s Earned Income Tax Credit. Republican members of the JFC all voted for that motion, even though the Legislative Fiscal Bureau paper notes that using those federal funds would exacerbate a large structural deficit in the funding available for the ongoing costs of child care subsidies and the welfare-to-work jobs program (W-2).
Putting aside the debate over the merits of transferring more TANF funds to the Department of Revenue (to offset state EITC spending), the interesting precedent is that the majority party is relying on a short-term source of federal funds – i.e., spending down an accrued balance of TANF funding – to replace state funding. In short, they are doing just what they’ve said our state shouldn’t do – by relying on a source of federal funding that could some day evaporate. By comparison, the federal Medicaid expansion dollars are a far more secure source of funds, particularly for the next couple of years. And in contrast to funding the existing EITC with TANF, Wisconsin could make the expansion of BadgerCare contingent upon the continued availability of the federal funding, as a number of other states have done.
Based on those two changes that the Finance Committee made to the Governor’s budget last Thursday, one could easily conclude that JFC members no longer have the aversion to using federal funds that some of them have expressed in the past. So maybe we should get ready to celebrate that the committee will decide to expand BadgerCare and save well over $345 million in the process. (See this blog post explaining why that amount will actually be much higher.)
Then again, maybe last Thursday’s votes aren’t relevant because the opposition to expanding BadgerCare isn’t really because the committee thinks it’s wrong to use federal funds.